Vacation compensation: when can vacation be replaced with money?

“Exchanging” vacation for money is allowed only in two cases:

upon dismissal of an employee if he has unused vacations;
if there are additional vacations exceeding 28 calendar days.

In every situation there are non-standard inputs, so let’s look at them in more detail.

What to do if vacation debt has accumulated
Compensation for vacation and tax claims
Compensation for part of the vacation, subject to the availability of additional
Compensation upon dismissal
Position of the Constitutional Court on compensation
Five unusual situations with vacation compensation
Registration and receipt of compensation for vacation: algorithm of actions
Calculation of vacation pay in 2021: calculator

What to do if vacation debt has accumulated

Employees often accumulate vacation arrears over several years. And in such cases, the employer is faced with the question: how to deal with them? Is it enough to compensate for unused vacation with money?

Art. 126 of the Labor Code of the Russian Federation establishes the basic norm for vacations: every citizen of the Russian Federation is guaranteed 28 days of rest per year worked. And he must use these days “in their natural form.”

Thus, if an employer has a debt, for example, of 100 days of vacation, because the employee has not had a vacation for 4 years, then he cannot simply replace this debt with compensation. Only if the employee quits. And in case of dismissal, the employer will have to pay compensation for all unused vacations, that is, for 4 years.

Cash compensation for vacation pay

The Labor Code of the Russian Federation allows compensation for vacation pay only in two cases:

Upon dismissal. The employer is obliged to compensate for all unused rest days due to the employee. They cannot refuse a payment of this nature.
If there are additional paid vacation days. Fundamental rest cannot be replaced with money under any circumstances (provided that the employee continues to work). Legislators have identified a number of conditions that affect the legality of assigning such compensation.

In both cases, a correct resignation letter with payment for untaken leave from the employee will be required.

Compensation for vacation and tax claims

When paying a large compensation, the employer risks entering into a dispute with the tax authorities. On their part, a question may arise: why was compensation for all 4 years included in income tax expenses?

The fact is that, in accordance with Art. 255 of the Tax Code of the Russian Federation, when calculating income tax, only compensation in accordance with labor legislation should be included in labor costs. At the same time, labor legislation directly prohibits the failure to provide annual paid leave for two years in a row (Article 124 of the Labor Code of the Russian Federation).

As a rule, the employer challenges the actions of the tax authorities through the court, referring to Art. 127 of the Labor Code of the Russian Federation, which states that in accordance with the Labor Code, he is obliged to pay compensation to the employee for all unused vacations.

How to correctly submit an application for compensation for unused vacation?

An employee who wishes to receive a certain amount of money in lieu of unused vacation may have questions, in particular, regarding the application for such compensation. How to compose it? Are there any statutory requirements for the application?

Neither the Labor Code of the Russian Federation nor Russian legislation on accounting impose special requirements for an employee’s application. It is only important that such a statement be written in the name of the head of the organization. The rest, including the form and content of the application, can be anything at the discretion of the employee.

You can find a completed sample application for vacation compensation on our website.

Compensation for part of the vacation, subject to the availability of additional

If the employee intends to continue working in the company, then only part of the annual paid leave exceeding 28 calendar days can be replaced with compensation. Such compensation is provided for those categories of employees who are entitled by law to extended basic leave - more than 28 days. These include:

disabled workers, duration of leave is at least 30 calendar days (Article 23 of Federal Law No. 181-FZ of November 24, 1995);
minor workers, vacation duration - 31 calendar days (Article 267 of the Labor Code of the Russian Federation);
municipal employees, vacation duration - 30 calendar days (Clause 3, Article 21 of Federal Law No. 25-FZ dated 03/02/2007).

There are also categories of employees who are entitled by law to annual additional paid leave:

workers engaged in work with harmful and (or) dangerous working conditions (Article 117 of the Labor Code of the Russian Federation);
employees with a special nature of work (Article 118 of the Labor Code of the Russian Federation);
workers with irregular working hours (Article 119 of the Labor Code of the Russian Federation);
workers working in the regions of the Far North and equivalent areas (Article 321 of the Labor Code of the Russian Federation, Article 14 of the Law of the Russian Federation of February 19, 1993 No. 4520-1).

Additional paid holidays may be established at the discretion of the employer, taking into account production and financial circumstances. At the same time, the conditions and procedure for granting such leaves are prescribed by collective agreements or local regulations.

It is worth noting that replacing part of the vacation with monetary compensation is not an obligation, but a right of the employer. Therefore, he may refuse compensation. This position is formulated, in particular, in the Decision of the Supreme Court of the Komi Republic dated August 15, 2011 No. 33-4410/2011).

In Part 3 of Art. 126 of the Labor Code of the Russian Federation identifies categories of employees in respect of whom the replacement of annual basic paid leave and annual additional paid leave with monetary compensation is not allowed:

pregnant women;
workers under 18 years of age;
employees engaged in work with harmful or dangerous working conditions - they are not replaced by money with annual additional paid leave.

All these employees can receive compensation for vacation only in one case - upon dismissal.

The minimum duration of additional leave is 7 calendar days (Article 117 of the Labor Code of the Russian Federation). However, the specific duration of such rest is established by the employment contract on the basis of an industry agreement and a collective agreement.

That part of the vacation that exceeds 7 calendar days can be replaced by compensation. To do this, the employee needs to write a statement. In addition, the provision for replacing additional leave with money must be reflected in the industry agreement or collective agreement.

Calculate vacation pay automatically and without errors

For an employee exposed to radiation as a result of the Chernobyl disaster, unused annual additional paid leave cannot be replaced by compensation (provided on the basis of clause 5 of Article 14 of the Law of the Russian Federation of May 15, 1991 No. 1244-1).

Example of calculation based on formulas, without a calculator

Let's look at how compensation for vacation upon dismissal is calculated using an example. To do this, we will derive the SDZ and the number of days not taken off using formulas (without a calculator).

Example:

Panfilov I.L. has been working at Cinema LLC since March 10, 2017, resigning on August 13, 2021. Every year Panfilov I.L. There are 28 days of rest according to the calendar. While working at Cinema LLC, he used 20 days in October 2017, 14 days in May 2018, 28 days in July 2019, that is, a total of 62. Monthly labor payments to I.L. Panfilov. — 30,000 rubles including bonus. Let's calculate how many days of rest Panfilov has left for 2021 - 2021.

We calculate the number of days of unused vacation upon dismissal using the formula:

Number of unused days for 2021 - 2021 = (3 × 28) - 62 = 22 days.

Over a three-year period from 2021 to 2021. Panfilov I.L. Allotted 84 days of rest (3 × 28), he used 62 days. The number of unused days for previous periods is 22.

How many vacation days did I.L. Panfilov accumulate? for 2021, if he worked for a full 5 months (5 months and 10 days, which are rounded down):

Number of unused days = (28 / 12) × 5 = 11.66 days.

Let’s say that according to the internal rules of the organization, days for compensation upon dismissal are rounded in favor of the employee. Then for 2021 Panfilov I.L. unused 12 days. The total number of days to be reimbursed is 22 + 12 = 34 days.

Let's calculate the average earnings of I.L. Panfilov. in a day. Taking into account the salary of 30,000 rubles, in 12 months he earns 360,000 rubles:

Now it’s easy to understand how vacation time is calculated when you quit 32 days in advance:

1023.89 × 34 = 34,812.26 rubles.

Final amount: before dismissal, Panfilov will receive 34,812 rubles 26 kopecks in compensation.

Compensation upon dismissal

The Labor Code does not have a rule for calculating compensation upon dismissal. Therefore, employers should rely on the old document - Rules on regular and additional leaves (approved by the People's Commissariat of Labor of the USSR on April 30, 1930 No. 169).

In the Rules, it is important to pay attention to clause 35, which states that “when calculating the terms of work that give the right to proportional additional leave or compensation for leave upon dismissal, surpluses amounting to less than half a month are excluded from the calculation, and surpluses amounting to not less than half a month, rounded up to a full month.”

In connection with this rule, the question may arise: how to count half of the month in February, which, as you know, has 28 days? You need to focus not on the calendar month, but on the working month, since vacation is provided for the working year.

Let's say you hired an employee on September 17, 2021. He will retire as of November 30, 2021. The employer needs to see how many full months the employee has worked. The first two months were fully worked out: from 09/17/20 to 10/16/20 and from 10/17/20 to 11/16/20. And the employee worked the third month from 11/17/20 to 11/30/20, therefore, according to clause 35 of the “Rules on regular and additional leaves”, compensation must be paid only for two months.

In what sequence should an employee be given unused annual leave?

Labor legislation does not contain provisions providing for the use of vacations for working periods in chronological order (Letter of Rostrud dated March 1, 2007 No. 473-6-0).

For example, an employee was hired by the organization on January 10, 2013. For various reasons, he was not granted annual leave until 2021. According to the schedule from July 1, the employee is provided with 14 days of annual paid leave for the working period from January 10, 2021 to January 9, 2021. At the request of the employee, annual leave of 28 days for the working period from 01/10/2015 to 01/09/2016 is added to this leave. Then in September the employee plans to use the next vacation for the working period from 01/10/2013 to 01/09/2014.

Unlike the calendar year, the working year is calculated not from January 1, but from the day the employee enters work (clause 1 of the Rules on regular and additional leaves, approved by the People's Commissariat of Labor of the USSR on April 30, 1930 No. 169, are currently in force insofar as they do not contradict Labor Code of the Russian Federation (Letter of Rostrud dated December 18, 2012 No. 1519-6-1)).

Position of the Constitutional Court on compensation

Resolution of the Constitutional Court of the Russian Federation dated October 25, 2018 No. 38-P finally answered two key questions related to compensation for vacation:

How many years can I claim compensation for? For example, if an employee has not taken vacation for 5 years, can he, upon dismissal, demand compensation for unused vacation for the entire period of work?
Do the vacation days remaining from the working year “burn out” after 18 months? Let us recall that Federal Law No. 139-FZ dated July 1, 2010 ratified ILO Convention No. 132 on paid holidays. According to Art. 9 of the Convention, a continuous part of annual paid leave is granted and used no later than within one year, and the remainder of annual paid leave no later than within 18 months after the end of the year for which the leave is granted.

The position of the Constitutional Court is that the requirement for compensation for unused vacation upon dismissal does not depend on the amount of time that has passed since the working year when the employee did not rest. In this case, a request for payment must be submitted within a year after dismissal. Previously, there were conflicting opinions on this issue, and even the courts often refused compensation.

The Constitutional Court Resolution describes the situation with a complaint from former employees of a large consulting and auditing company. The courts considered their cases based on international standards, according to which the period for applying for payment is shorter compared to the Labor Code. The Constitutional Court did not support this approach.

According to the ILO Convention, leave must be taken within 18 months after the end of the year for which the leave is due. And the Constitutional Court interprets these rules in favor of workers - as a guarantee that vacation should not be postponed indefinitely. If the employee does not take vacation during this period, the application of the ILO convention does not mean that vacation days “burn out.”

Thus, upon dismissal, an employee has the right to demand money for unused vacation days for the entire period of work.

Is it possible to transfer

If, due to any circumstances, employees have unused annual leave for the previous period, then they retain the right to use all due annual leave. This right is reserved to them by Art. 114, 122, 124.

According to Rostrud letter No. 1921-6 of 2007, annual paid leave for the previous period can be provided as part of the vacation schedule for the next year or by agreement between the employee and the employer. Several vacations may be taken during a calendar year.

In Rostrud Letter No. 473-6-0 of 2007, department specialists point out that labor legislation does not contain provisions that would provide for the use of vacations in chronological order. That is, annual leave can be granted in any order: for example, first for the current year, then for the previous one.

Five unusual situations with vacation compensation

The employee worked for the organization for 4 months, during which time he was on leave without pay for 23 calendar days. Is he entitled to compensation upon dismissal? Expert answer.
The director of a small company holds several positions. He hasn't been on vacation for 2 years. Can he be compensated for his vacation? Expert answer.
There is only one employee in the company, his position is general director. He can't go on vacation. Should he receive compensation for unused vacation so that there are no problems with the State Tax Inspectorate? Expert answer.
To calculate compensation for unused vacation, you need to determine the employee’s average earnings. What about February? Should we count only full months of work? Expert answer.
The employee was on leave without pay for 12 months. How to calculate the amount of compensation for unused vacation? Expert answer.

How to use the calculator

To calculate the compensation due using our calculator you will need:

Enter the appropriate dates in the “reception date” and “calculation date” fields. To do this, you need to use the calendar built into the field.
Select periods that are not included in the employee’s vacation period (for example, periods of suspension from work).
Select the reason for terminating the employment contract from the drop-down list in the “Reason for dismissal” field.
Indicate the number of days of annual leave.
Indicate the duration of vacation for the entire period of work.
Enter the employee's average daily earnings in the appropriate field. To calculate the average daily salary, you can use our special calculator.
Click the "CALCULATE" button.

The calculator will produce a result that will contain:

amount of compensation;
the number of days for which it is due;
the amount of severance pay, if required by law;
the total amount of payment that is supposed to be paid to the employee.

Registration and receipt of compensation for vacation: algorithm of actions

To receive money in exchange for part of the vacation, the employee must write an application. You can use the sample.

Having received an application from the employee, the employer issues an order to replace part of the vacation with monetary compensation. The form of the order is arbitrary.

The order must indicate:

Full name and position of the employee;
the number of vacation days that must be replaced by monetary compensation, the billing period;
the basis for issuing the order;
details of the employee's application.

The employee reads the order and signs. After this, the employer enters into the employee’s personal card in section 8 “Vacation” information about the replacement of part of the annual paid leave with monetary compensation.

Filling out the remaining columns:

Column 1 “Type of leave” specifies which leave is replaced by monetary compensation (main, additional).
Columns 2 and 3 “Periods of work” are filled out according to the general rules.
The number of vacation days that are subject to replacement with compensation is indicated in column 4 “Number of calendar days of vacation.”
In columns 5 and 6, the corresponding entry “Replacement of vacation with monetary compensation” is made.
Column 7 “Grounds” reflects the details of the order. The same information should be recorded in the vacation schedule - in column 10 “Note”. Just make a note that part of the annual leave has been replaced by money, indicating the number of compensated days.

Last year's vacation on schedule

How to properly grant last year's leave? At the request of the employee or by inclusion in the schedule? There are supporters of both methods.

The first refer to Article 124 of the Labor Code of the Russian Federation: it states that the transfer of vacation is carried out upon application .

Download Application for transfer of leave

Another part of accountants and personnel officers believe that this does not exclude the need to include “overdue” vacation in the schedule. After all, the employee may not write a statement, and then there will be no other grounds to send him on leave.

Article 124 deals with a situation where the employer did not warn the employee 2 weeks in advance and did not give him vacation pay. In this case, indeed, the employee should receive a leave application.